# Calculate Future Value of Money and Investment Using MATLAB

Question

The future-value-of-money formula relates how much a current investment will be worth in the future, assuming a constant interest rate.

ð¹ð‘‰=ð‘ƒð‘‰×(1+ð‘™)n

Where

FV is the future value

PV is the present value or investment

I  is the interest rate expressed as a fractional amount per compounding period—i.e., 5% is expressed as .05 n is the number of compounding periods.

(a) Create a MATLAB® function called future_ value with three inputs: the investment (present value), the interest rate expressed as a fraction, and the number of compounding periods.

(b) Use your function to determine the value of a \$1000 investment in 10 years, assuming the interest rate is 0.5% per month, and the interest is compounded monthly.

Summary

This question belongs to MATLAB software and discusses about application of MATLAB in finance to create a MATLAB file which calculates future value of money.

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